Manufacturing, Construction Continue To Improve

January was the 30^th consecutive month during which economic activity in the manufacturing sector expanded in the United States, bolstering hopes that the economy has started to turn upward after the recession.

Exports grew by two percent while imports decreased, according to a report by the Institute for Supply Management. New orders and exports are accelerating, while employment and production expanded, but at a slower rate than last month.

“Manufacturing is starting out the year on a positive note, with new orders, production and employment all growing in January,” said organization chair Bradley Holcomb in a statement accompanying the report.

And unemployment fell more than expected in January, according to the most recent report by the Bureau of Labor Statistics, now standing at 8.3 percent. The strongest gains in manufacturing, which led growth along with professional services and hospitality, were in durable goods manufacturing, including fabricated metal products, machinery, and automotive parts.

Construction also continued to grow at least through December, according to a release [PDF] by the Commerce Department. That's likely due to mild temperatures across much of the country this winter, which have let contractors expand the construction season. But it also suggests that consumers have the capital and confidence to take on new projects.

(Read More About Jobs and the Economy at Campus Progress.)

Also in January, the White House introduced a plan to encourage domestic manufacturing—and bringing overseas jobs back on-shore, which the administration has termed “insourcing”—using a strategy of tax incentives and advocacy.

“I don’t want America to be a nation that’s primarily known for financial speculation and racking up debt buying stuff from other nations,” President Obama said during a forum encouraging companies to invest in the United States. “I want us to be known for making and selling products all over the world stamped with three proud words: 'Made in America.' And we can make that happen.”

Manufacturing and job growth have fueled modest gains in the stock market, as well. And some economists speculated in January that the country could be entering a virtuous cycle—a beneficial phenomenon in which hiring and spending rise and feed off each other.

The ongoing good news for the economy may be harbingers of a more full-fledged recovery following the recession, but in the short term they also suggest that the domestic markets has resisted the crisis in the European Union, at least for now.

The Institute for Supply Management is a not-for-profit research and certification organization founded in the early 20th century. The group's monthly manufacturing report is compiled from a pool of purchasing and supply executives in the United States.

Jon Christian is a staff writer with Campus Progress. Follow him on Twitter @Jon_Christian.

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